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EXHIBIT 10.1
SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE AGREEMENT (the "AGREEMENT"), dated as of May
21, 2001 (the "CLOSING DATE"), is entered into by and among Visual Data
Corporation, a Florida corporation, with headquarters located at 0000 X.X. 00xx
Xxxxxx, Xxxxxxx Xxxxx, Xxxxxxx 00000 (the "COMPANY"), and the investors listed
on SCHEDULE 1 attached hereto (the "BUYER").
WHEREAS:
A. The Company and the Buyer are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by Regulation S ("REGULATION S") as promulgated by the United States Securities
and Exchange Commission (the "SEC") under the Securities Act of 1933, as amended
(the "1933 ACT");
B. The Buyer wishes to purchase, upon the terms and conditions stated
in this Agreement, an aggregate of 730,638 shares of the Company's Common Stock,
par value $.0001 per share (the "COMMON SHARES") and a warrant (the "WARRANT"),
substantially in the form of EXHIBIT D hereto, to purchase 146,128 shares of the
Company's Common Stock, par value $.0001 per share (the "WARRANT SHARES") in the
respective amounts set forth opposite the Buyer's name on SCHEDULE 1; and
C. Contemporaneously with the execution and delivery of this Agreement,
the parties hereto are executing and delivering a Registration Rights Agreement
substantially in the form attached hereto as EXHIBIT A (the "REGISTRATION RIGHTS
AGREEMENT") pursuant to which the Company has agreed to provide certain
registration rights under the 1933 Act and the rules and regulations promulgated
thereunder, and applicable state securities laws.
NOW THEREFORE, the Company and the Buyer hereby agree as follows:
1. PURCHASE AND SALE OF COMMON SHARES AND WARRANTS.
a. PURCHASE OF COMMON SHARES AND WARRANTS. In connection with
the offering (the "OFFERING") by the Company of its common stock and warrants to
the Buyer, and subject to the satisfaction (or waiver) of the conditions set
forth in Sections 6 and 7 below, the Company shall issue and sell to the Buyer
and the Buyer severally agrees to purchase from the Company the respective
number of shares of Common Shares set forth opposite the Buyer's name on
SCHEDULE 1 (the "CLOSING"). The
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purchase price (the "PURCHASE PRICE") of the Common Shares and the Warrant at
the Closing shall be $1,500,000.00.
b. FORM OF PAYMENT. On the Closing Date, (i) the Buyer shall
pay the Purchase Price to a trust account with Atlas Xxxxxxxx, P.A., located at
000 X. Xxx Xxxx Xxxx., Xxxxx 0000, Xx. Xxxxxxxxxx, Xxxxxxx 00000, as escrow
agent (the "ESCROW AGENT"), for the Common Shares to be issued and sold to the
Buyer at the Closing, by wire transfer of immediately available funds in
accordance with the Company's written wire instructions, and (ii) the Company
shall deliver to the Escrow Agent, on behalf of the Buyer, the Warrant and the
stock certificates (in the denominations as the Buyer shall request) (the
"COMMON SHARE CERTIFICATES") representing such number of the Common Shares which
the Buyer is then purchasing (as indicated opposite the Buyer's name on SCHEDULE
1) hereunder, duly executed on behalf of the Company and registered in the name
of the Buyer or its designee. Upon the completion of the conditions contained in
Sections 6 and 7 of this Agreement, the Escrow Agent shall deliver the
certificates representing the Common Shares and the Warrant to the Buyer via
overnight courier and the Escrow Agent shall then wire the Purchase Price to the
Company.
2. BUYER'S REPRESENTATIONS AND WARRANTIES.
Each Buyer represents and warrants with respect to only itself
that:
a. INVESTMENT PURPOSE. Such Buyer is acquiring the Common
Shares and Warrant (the Common Shares, Warrant and Warrant Shares may also be
referred to herein as the "SECURITIES"), for its own account for investment only
and not with a view towards, or for resale in connection with, the public sale
or distribution thereof, except pursuant to sales registered or exempted under
the 1933 Act; provided, however, that by making the representations herein, the
Buyer does not agree to hold any of the Securities for any minimum or other
specific term and reserves the right to dispose of the Securities at any time in
accordance with or pursuant to a registration statement or an exemption under
the 1933 Act.
b. ACCREDITED INVESTOR STATUS. Such Buyer is an "accredited
investor" as that term is defined in Rule 501 of Regulation D as promulgated by
the SEC under the 1933 Act ("REGULATION D").
c. RELIANCE ON EXEMPTIONS. Such Buyer understands that the
Securities are being offered and sold to it in reliance on specific exemptions
from the registration requirements of United States federal and state securities
laws and that the Company is relying in part upon the truth and accuracy of, and
the Buyer's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of the Buyer set forth herein in order to
determine the availability of such exemptions and the eligibility of the Buyer
to acquire such Securities.
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d. INFORMATION. Such Buyer and its advisors, if any, have been
furnished with all materials relating to the business, finances and operations
of the Company and materials relating to the offer and sale of the Securities
which have been requested by the Buyer. Such Buyer and its advisors, if any,
have been afforded the opportunity to ask questions of the Company. Neither such
inquiries nor any other due diligence investigations conducted by the Buyer or
its advisors, if any, or its representatives shall modify, amend or affect the
Buyer's right to rely on the Company's representations and warranties contained
in Section 3 below. Such Buyer understands that its investment in the Securities
involves a high degree of risk. Such Buyer has sought such accounting, legal and
tax advice as it has considered necessary to make an informed investment
decision with respect to its acquisition of the Securities.
e. NO GOVERNMENTAL REVIEW. Such Buyer understands that no
United States federal or state agency or any other government or governmental
agency has passed on or made any recommendation or endorsement of the Securities
or the fairness or suitability of the investment in the Securities nor have such
authorities passed upon or endorsed the merits of the offering of the
Securities.
f. TRANSFER OR RESALE. Such Buyer understands that all offers
and sales of the Securities prior to the expiration of the Restricted Period
(defined below) shall only be made in compliance with Regulation S, pursuant to
an effective registration statement in accordance with the 1933 Act covering the
Securities for resale or pursuant to an exemption from registration under the
1933 Act, and all offers and sales of the Securities after the Restricted Period
shall be made only pursuant to such an effective registration statement or
pursuant to such exemption from registration.
g. LEGENDS. Such Buyer understands that the certificates or
other instruments representing the Securities, until such time as the sale of
the Securities has been registered under the 1933 Act as contemplated by the
Registration Rights Agreement, except as set forth below, shall bear a
restrictive legend in substantially the following form (and a stop-transfer
order may be placed against transfer of such stock certificates):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR
APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD IN THE
UNITED STATES OF AMERICA OR TO OR FOR THE ACCOUNT OR BENEFIT OF A U.S.
PERSON, AS DEFINED IN REGULATION S ("REGULATION S") AS PROMULGATED
UNDER THE 1933 ACT (OTHER THAN DISTRIBUTORS AS DEFINED IN REGULATION S)
DURING THE RESTRICTED PERIOD (AS DEFINED IN REGULATION S) UNLESS (1)
THE SECURITIES ARE REGISTERED PURSUANT TO AN EFFECTIVE
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REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE 1933 ACT OR (2) THE
SECURITIES ARE OFFERED AND SOLD PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE 1933 ACT.
The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of the Securities upon which it is
stamped, if, unless otherwise required by state securities laws, (i) such
Securities are registered for sale under the 1933 Act and the Securities are
being sold pursuant to a Registration Statement, (ii) in connection with a sale
transaction, such holder provides the Company (and its counsel) with an opinion
of counsel, in a generally acceptable form, to the effect that a public sale,
assignment or transfer of the Securities may be made without registration under
the 1933 Act or (iii) such holder provides the Company (and its counsel) with
reasonable assurances that the Securities can be sold pursuant to Rule 144
without any restriction as to the number of securities acquired as of a
particular date that can then be immediately sold.
h. VALIDITY; ENFORCEMENT. This Agreement has been duly and
validly authorized, executed and delivered on behalf of the Buyer and is a valid
and binding agreement of the Buyer enforceable against the Buyer in accordance
with its terms, subject as to enforceability to general principles of equity and
to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation
and other similar laws relating to, or affecting generally, the enforcement of
applicable creditors' rights and remedies.
i. RESIDENCY. Such Buyer is a resident of that country
specified in its address on SCHEDULE 1.
j. BROKER-DEALER. Buyer does not control, is not controlled by
and is not under common control with, a broker-dealer registered pursuant to the
1934 Act.
k. REGULATION S REPRESENTATIONS.
i. The Buyer is not a "U.S. person," as that term is
defined in Regulation S (a "U.S. PERSON");
ii. As of the Closing Date, the Buyer is located
outside the United States of America;
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iii. The Buyer is acquiring the Common Shares and
Warrant for its own account and not on behalf of any U.S. Person, and the Buyer
has not entered into any pre-arranged sale or distribution of the Securities
with a purchaser in the United States of America;
iv. The Buyer acknowledges that all offers and sales
of the Securities prior to the expiration of a period commencing on the Closing
Date and ending one (1) year thereafter (the "RESTRICTED PERIOD") shall only be
made in compliance with Regulation S, pursuant to an effective registration
statement in accordance with the 1933 Act covering the Securities for resale or
pursuant to an exemption from registration under the 1933 Act;
v. The Buyer acknowledges that, in the view of the
SEC, the statutory exemption claimed for this transaction would not be present
if the offering of the Common Shares and Warrant, although in technical
compliance with Regulation S, is part of a plan or scheme to evade the
registration provisions of the 1933 Act; and
vi. The Buyer is not acting as an underwriter of, or
dealer in, the Securities; the Buyer is not participating, pursuant to a
contractual agreement, in the distribution of the Securities.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to the Buyer that:
a. ORGANIZATION AND QUALIFICATION. The Company and its
"SUBSIDIARIES" (which for purposes of this Agreement means any entity in which
the Company, directly or indirectly, owns a controlling position of capital
stock or holds a controlling position of an equity or similar interest) are
corporations duly organized and validly existing in good standing under the laws
of the jurisdiction in which they are incorporated, and have the requisite
corporate power and authorization to own their properties and to carry on their
business as now being conducted. Each of the Company and its Subsidiaries is
duly qualified as a foreign corporation to do business and is in good standing
in every jurisdiction in which its ownership of property or the nature of the
business conducted by it makes such qualification necessary, except to the
extent that the failure to be so qualified or be in good standing would not have
a Material Adverse Effect. As used in this Agreement, "MATERIAL ADVERSE EFFECT"
means any material adverse effect on the business, properties, assets,
operations, results or operations or financial condition of the Company and its
Subsidiaries, if any, taken as a whole, or on the transactions contemplated
hereby or by the agreements and instruments to be entered into in connection
herewith, or on the authority or ability of
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the Company to perform its obligations under the Transaction Documents (as
defined below).
b. AUTHORIZATION; ENFORCEMENT; VALIDITY. (i) The Company has
the requisite corporate power and authority to enter into and perform this
Agreement, the Registration Rights Agreement, the Transfer Agent Instructions
(as defined in Section 5), the Warrant and each of the other agreements entered
into by the parties hereto in connection with the transactions contemplated by
this Agreement (collectively, the "TRANSACTION DOCUMENTS"), and to issue the
Securities in accordance with the terms hereof and thereof, (ii) the execution
and delivery of the Transaction Documents by the Company and the consummation by
it of the transactions contemplated hereby and thereby, including without
limitation the issuance of the Common Shares and Warrant and the reservation for
issuance and the issuance of the Warrant Shares issuable upon exercise thereof,
have been duly authorized by the Company's Board of Directors and no further
consent or authorization is required by the Company, its Board of Directors or
its stockholders, (iii) the Transaction Documents have been duly executed and
delivered by the Company, and (iv) the Transaction Documents constitute the
valid and binding obligations of the Company enforceable against the Company in
accordance with their terms, except as such enforceability may be limited by
general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of creditors' rights and remedies.
c. ISSUANCE OF SECURITIES. The Securities are duly authorized
and, upon issuance in accordance with the terms hereof, shall be (i) validly
issued, fully paid and non-assessable and (ii) free from all taxes, liens and
charges with respect to the issue thereof. Assuming the accuracy of the
representations, warranties and agreements of the Company and the Buyer
contained in this Agreement, the issuance by the Company of the Securities is
exempt from registration under the 1933 Act.
d. NO CONFLICTS. The execution, delivery and performance of
the Transaction Documents by the Company and the consummation by the Company of
the transactions contemplated hereby and thereby (including, without limitation,
the Company's issuance of the Common Shares and Warrant and the reservation for
issuance and issuance of the Warrant Shares) will not (i) result in a violation
of the Company's Certificate of Incorporation, as amended and as in effect on
the date hereof (the "CERTIFICATE OF INCORPORATION") or the Company's By-laws,
as amended and as in effect on the date hereof (the "BY-LAWS") or (ii) conflict
with, or constitute a default (or an event which with notice or lapse of time or
both would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any material agreement, indenture or
instrument to which the Company or any of its Subsidiaries is a party, or result
in a violation of any law, rule, regulation, order,
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judgment or decree (including federal and state securities laws and regulations
and the rules and regulations of the Principal Market (as defined below))
applicable to the Company or any of its Subsidiaries or by which any property or
asset of the Company or any of its Subsidiaries is bound or affected, except
where such default, termination, amendment, acceleration, cancellation,
violation or conflict would not have a Material Adverse Effect. Neither the
Company nor its Subsidiaries is in violation of any term of or in default under
its Certificate of Incorporation, or By-laws or their organizational charter or
by-laws, respectively. Neither the Company or any of its Subsidiaries is in
violation or any term of or in default under any material contract, agreement,
mortgage, indebtedness, indenture, instrument, judgment, decree or order or any
statute, rule or regulation applicable to the Company or its Subsidiaries,
except for possible conflicts, defaults, terminations, amendments which would
not have a Material Adverse Effect. The business of the Company and its
Subsidiaries is not being conducted, and shall not be conducted, in violation of
any law, ordinance, regulation of any governmental entity, except for possible
violations the sanctions for which either individually or in the aggregate would
not have a Material Adverse Effect. Except as specifically contemplated by this
Agreement and as required under the 1933 Act, any applicable state "Blue Sky"
laws or the Principal Market (as defined below), the Company is not required to
obtain any consent, authorization or order of, or make any filing or
registration with, any court or governmental agency or any regulatory or
self-regulatory agency in order for it to execute, deliver or perform any of its
obligations under or contemplated by the Transaction Documents in accordance
with the terms hereof or thereof. All consents, authorizations, orders, filings
and registrations which the Company is required to obtain pursuant to the
preceding sentence have been obtained or effected on or prior to the date
hereof. The Company is in compliance with the listing requirements of the
Principal Market (as defined below).
e. SEC DOCUMENTS; FINANCIAL STATEMENTS. As of the Closing, the
Company has filed all reports, schedules, forms, statements and other documents
required to be filed by it with the SEC pursuant to the reporting requirements
of the Securities Exchange Act of 1934, as amended (the "1934 ACT") (all of the
foregoing filed prior to the date hereof and all exhibits included therein and
financial statements and schedules thereto and documents incorporated by
reference therein being hereinafter referred to as the "SEC DOCUMENTS"). As of
their respective dates, the SEC Documents complied in all material respects with
the requirements of the 1934 Act and the rules and regulations of the SEC
promulgated thereunder applicable to the SEC Documents, and none of the SEC
Documents, at the time they were filed with the SEC, knowingly contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
financial statements included in the SEC Documents have been prepared in
accordance with generally accepted accounting principles, consistently applied,
during
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the periods involved (except (i) as may be otherwise indicated in such financial
statements or the notes thereto, or (ii) in the case of unaudited interim
statements, to the extent they may exclude footnotes or may be condensed or
summary statements) and fairly present in all material respects the financial
position of the Company as of the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments). Neither the Company
nor any of its Subsidiaries or any of their officers, directors, employees or
agents have provided the Buyer with any material, nonpublic information.
f. ABSENCE OF CERTAIN CHANGES. Since the most recent filing by
the Company with the SEC, there has been no material adverse change in the
business, properties, operations, financial condition, results of operations of
the Company or its Subsidiaries. The Company has not taken any steps, and does
not currently expect to take any steps, to seek protection pursuant to any
bankruptcy law.
g. ABSENCE OF LITIGATION. Except as set forth in the SEC
Documents, there is no action, suit, proceeding, inquiry or investigation before
or by any court, public board, government agency, self-regulatory organization
or body pending or, to the knowledge of the Company or any of its Subsidiaries,
threatened against or affecting the Company, the Company's common stock, the
Common Shares or any of the Company's Subsidiaries or any of the Company's or
the Company's Subsidiaries' officers or directors in their capacities as such
which would have a Material Adverse Effect.
h. [Reserved].
i. NO UNDISCLOSED EVENTS, LIABILITIES, DEVELOPMENTS OR
CIRCUMSTANCES. To the Company's knowledge, no event, liability, development or
circumstance has occurred or exists, with respect to the Company or its
Subsidiaries or their respective business, properties, operations or financial
condition, that would be required to be disclosed by the Company under
applicable securities laws on a registration statement filed with the SEC
relating to an issuance and sale by the Company of its common stock and which
has not been publicly announced.
j. NO GENERAL SOLICITATION; NO DIRECTED SELLING EFFORTS.
Neither the Company, nor any of its affiliates, nor any person acting on its or
their behalf, has engaged in any form of general solicitation or general
advertising (within the meaning of Regulation D as promulgated by the SEC under
the 0000 Xxx) in connection with the offer or sale of the Securities. In regard
to the Offering, the Company has not conducted any "directed selling efforts"
(as defined in Regulation S).
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k. REGULATION S REPRESENTATIONS. The Company is a reporting
issuer as defined by Regulation S. The Company has not offered the Securities to
any person in the United States of America or to any U.S. Person or for the
account or benefit of any U.S. Person.
l. EMPLOYEE RELATIONS. Neither the Company nor any of its
Subsidiaries is involved in any union labor dispute nor, to the knowledge of the
Company or any of its Subsidiaries, is any such dispute threatened.
m. INTELLECTUAL PROPERTY RIGHTS. The Company and its
Subsidiaries own or possess adequate rights or licenses to use all trademarks,
trade names, service marks, service xxxx registrations, service names, patents,
patent rights, copyrights, inventions, licenses, approvals, governmental
authorizations, trade secrets and rights necessary to conduct their respective
businesses as now conducted. None of the Company's trademarks, trade names,
service marks, service xxxx registrations, service names, patents, patent
rights, copyrights, inventions, licenses, approvals, government authorizations,
trade secrets or other intellectual property rights have expired or terminated,
or are expected to expire or terminate within one year from the date of this
Agreement. The Company and its Subsidiaries do not have any knowledge of any
infringement by the Company or its Subsidiaries of trademark, trade name rights,
patents, patent rights, copyrights, inventions, licenses, service names, service
marks, service xxxx registrations, trade secret or other similar rights of
others.
n. ENVIRONMENTAL LAWS. Except in such an event which would not
result in a Material Adverse Effect, the Company and its Subsidiaries (i) are in
compliance with any and all applicable foreign, federal, state and local laws
and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("ENVIRONMENTAL LAWS"), (ii) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval.
o. TITLE. The Company and its Subsidiaries have good and
marketable title in fee simple to all real property and good and marketable
title to all personal property owned by them which is material to the business
of the Company and its Subsidiaries, in each case free and clear of all liens,
encumbrances and defects except such as are described in the SEC Documents or
such as do not materially affect the value of such property and do not interfere
with the use made and proposed to be made of such property by the Company and
any of its Subsidiaries or would not result in a Material Adverse Effect. Any
real property and facilities held under lease by the Company and any of its
Subsidiaries are held by them under valid, subsisting and
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enforceable leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and buildings by the
Company and its Subsidiaries.
p. [Reserved].
q. REGULATORY PERMITS. Except in such an event which would not
result in a Material Adverse Effect, the Company and its Subsidiaries possess
all certificates, authorizations and permits issued by the appropriate federal,
state or foreign regulatory authorities necessary to conduct their respective
businesses, and neither the Company nor any such Subsidiary has received any
notice of proceedings relating to the revocation or modification of any such
certificate, authorization or permit.
r. TAX STATUS. Except in such an event which would not result
in a Material Adverse Effect, the Company and each of its Subsidiaries has made
or filed all federal and state income and all other tax returns, reports and
declarations required by any jurisdiction to which it is subject (unless and
only to the extent that the Company and each of its Subsidiaries has set aside
on its books provisions reasonably adequate for the payment of all unpaid and
unreported taxes) and has paid all taxes and other governmental assessments and
charges that are material in amount, shown or determined to be due on such
returns, reports and declarations, except those being contested in good faith
and has set aside on its books provision reasonably adequate for the payment of
all taxes for periods subsequent to the periods to which such returns, reports
or declarations apply. There are no current unpaid taxes in any material amount
claimed to be due by the taxing authority of any jurisdiction.
s. TRANSACTIONS WITH AFFILIATES. Except as set forth in the
SEC Documents filed at least ten days prior to the date hereof, none of the
officers, directors, or controlling shareholders of the Company is presently a
party to any transaction with the Company or any of its Subsidiaries (other than
for services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of the Company, any corporation, partnership, trust or other entity in
which any officer, director, or any such employee has a substantial interest or
is an officer, director, trustee or partner.
t. CURRENT PUBLIC INFORMATION. The Company is currently
eligible to register the resale of the Common Shares and Warrant Shares on a
registration statement on Form S-3 under the 1933 Act.
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4. COVENANTS.
a. BEST EFFORTS. Each party shall use its reasonable best
efforts timely to satisfy each of the conditions to be satisfied by it as
provided in Sections 6 and 7 of this Agreement.
b. [Omitted].
c. REPORTING STATUS. Until the earlier of (i) the date which
is one year after the date as of which the Investors (as that term is defined in
the Registration Rights Agreement) may sell all of the Securities without
restriction pursuant to Rule 144(k) promulgated under the 1933 Act (or successor
thereto), or (ii) the date on which the Investors shall have sold all the
Securities (the "REGISTRATION PERIOD"), the Company shall use its best efforts
to file all reports required to be filed with the SEC pursuant to the 1934 Act.
d. BUYER'S SALE OF COMMON SHARES. From the Closing Date,
through and including the date which is the later of (i) the ninetieth (90th)
calendar day following the Closing Date or (ii) the thirtieth (30th) calendar
day following the date (the "REGISTRATION EFFECTIVENESS DATE") on which the
Registration Statement (as defined in the Registration Rights Agreement)
covering for resale the Common Shares and Warrant Shares is declared effective,
the Buyer shall not sell, transfer or dispose the Common Shares or Warrant
Shares, nor shall the Buyer enter into any hedging transactions, short sales or
options or other transaction with broker-dealers or any other third party which
requires the delivery to the broker-dealer or third party of the shares to be
registered under the Registration Statement which the broker may resell pursuant
to the effective Registration Statement. From the date which is the later of (i)
the ninety-first (91st) calendar day following the Closing Date or (ii) the
thirty-first (31st) calendar day following the Registration Effectiveness Date,
through and including the date which is the later of (i) the one hundred
twentieth (120th) calendar day following the Closing Date or (ii) the sixtieth
(60th) calendar day following the Registration Effectiveness Date, the Buyer
shall have the right to transfer, sell or dispose, in any manner whatsoever,
pursuant to a Registration Statement or pursuant to an exemption from
registration under the 1933 Act, fifty percent (50%) of the Common Shares
purchased by the Buyer and fifty percent (50%) of the Warrant Shares underlying
the Warrant purchased by the Buyer. From the date which is the later of (i) the
one hundred twenty-first (121st) calendar day following the Closing Date or (ii)
the sixty-first (61st) calendar day following the Registration Effectiveness
Date, the Buyer shall have the right to transfer, sell or dispose, in any manner
whatsoever, pursuant to a Registration Statement or pursuant to an exemption
from registration under the 1933 Act, one hundred percent (100%) of the Common
Shares then held by the Buyer and the Warrant Shares underlying the Warrant.
Notwithstanding anything to the contrary contained herein, the
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restrictions set forth in this Section 4(d) shall not apply from the date which
is the one hundred eightieth (180th) calendar day following the Closing Date
(the "FINAL LOCK-UP DATE"), and after such Final Lock-Up Date, Buyer shall have
the right to transfer, sell or dispose, in any manner whatsoever, pursuant to a
Registration Statement or pursuant to an exemption from registration under the
1933 Act, one hundred percent (100%) of the Common Shares then held by the Buyer
and the Warrant Shares underlying the Warrant.
e. RIGHT OF FIRST REFUSAL. Subject to the exceptions described
below and the right of first refusal of Halifax Fund, L.P. ("HALIFAX") and
Palladin Opportunity Fund, LLC ("PALLADIN") outstanding as of the Closing Date,
the Company and its Subsidiaries shall not negotiate or contract with any party
for any equity financing (including any debt financing with an equity component)
or issue any equity securities of the Company or any Subsidiary or securities
convertible or exchangeable into or for equity securities of the Company or any
Subsidiary (including debt securities with an equity component) in any form
("FUTURE OFFERINGS") during the period beginning on the date hereof and ending
on, and including, the date which is 90 days after the Closing Date, unless (i)
each of Halifax and Palladin shall have waived any and all rights of first
refusal they have pursuant to the terms and conditions of that certain Purchase
Agreement dated as of December 8, 2000, as amended, by and between the Company,
Halifax and Palladin (the "Halifax/Palladin Purchase Agreement") and (ii) it
shall have first delivered to the Buyer or a designee appointed by the Buyer
written notice (the "FUTURE OFFERING NOTICE") describing the proposed Future
Offering, including the terms and conditions thereof, and providing the Buyer an
option to purchase its Aggregate Percentage (as defined below) of the securities
to be issued in such Future Offering, as of the date of delivery of the Future
Offering Notice, in the Future Offering (the limitations referred to in this
sentence is referred to as the "CAPITAL RAISING LIMITATIONS"). For purposes of
this Section 4(e), "AGGREGATE PERCENTAGE" at any time with respect to the Buyer
shall mean the percentage obtained by dividing (i) the aggregate number of the
Common Shares initially issued to the Buyer by (ii) the aggregate number of the
Company's restricted common stock sold to certain purchasers by the Company in
connection with the Offering and the offering of Company restricted common stock
to certain other investors pursuant to that other securities purchase agreement
of even date herewith. A Buyer can exercise its option to participate in a
Future Offering by delivering written notice thereof to participate to the
Company within five (5) business days after receipt of a Future Offering Notice,
which notice shall state the quantity of securities being offered in the Future
Offering that the Buyer will purchase (such amount equaling the Buyer's
Aggregate Percentage), and that number of securities it is willing to purchase
in excess of its Aggregate Percentage. In the event that one or more investors
participating in this Offering, including without limitation, the other
investors identified in that other securities purchase agreement of even date
herewith, fail to elect to purchase such investor's Aggregate Percentage (each
such investor, a "Rejecting Investor"), then the remaining
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investor(s) willing to purchase a number of securities in such Future Offering
must either (A) additionally purchase the Rejecting Investor's Aggregate
Percentage of such Future Offering or (B) forfeit such investor's right of first
refusal with respect to such Future Offering (and such forfeit shall not affect
the Buyer's ability or rights to exercise their right of first refusal with
respect to later Future Offerings). In the event the Buyer fail to participate
in the Future Offering within the periods described in this Section 4(e), the
Company shall have 60 days thereafter to sell the securities of the Future
Offering, upon terms and conditions, no more favorable to the purchasers thereof
than specified in the Future Offering Notice. In the event the Company has not
sold such securities of the Future Offering within such 60 day period, the
Company shall not thereafter issue or sell such securities without first
offering such securities to the Buyer in the manner provided in this Section
4(e). The Capital Raising Limitations shall not apply to (i) a loan from a
commercial bank which does not have any equity feature, (ii) any transaction
involving the Company's issuances of securities (A) as consideration in a merger
or consolidation, or (B) as consideration for the acquisition of a business,
product, license or other assets by the Company, (iii) the issuance of common
stock in a firm commitment, underwritten public offering, (iv) the issuance of
securities upon exercise or conversion of the Company's options, warrants or
other convertible securities outstanding as of the date hereof, (v) the grant of
additional options or warrants, or the issuance of additional securities, under
any Company stock option plan, restricted stock plan or stock purchase plan for
the benefit of the Company's employees or directors, (vi) the issuance of common
stock to the Placement Agent (as defined in Section 11(m) below) in connection
with the Placements Agent's role as placement agent in the Offering or (vii) the
Company's issuance of securities pursuant to any investment or financing as a
result of which the Company receives in excess of $8,000,000.00 in cash or cash
equivalents. The Buyer shall not be required to participate or exercise their
right of first refusal with respect to a particular Future Offering in order to
exercise their right of first refusal with respect to later Future Offerings.
f. LISTING. The Company shall promptly secure the listing of
all of the Registrable Securities (as that term is defined in the Registration
Rights Agreement) upon each national securities exchange and automated quotation
system, if any, upon which shares of the Company's common stock are then listed
(subject to official notice of issuance) and shall maintain, so long as any
other shares of common stock shall be so listed, such listing of all Registrable
Securities from time to time issuable under the terms of the Transaction
Documents. The Company shall maintain the Common Stock's authorization for
quotation on the Nasdaq National Stock Market, Nasdaq Small-Cap Market, The New
York Stock Exchange, Inc. or The American Stock Exchange, Inc., as applicable
(the "PRINCIPAL MARKET"). Neither the Company nor any of its Subsidiaries shall
take any action which would be, in their good faith business judgment,
reasonably expected to result in the delisting or suspension of Company
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common stock on the Principal Market. The Company shall promptly, and in no
event later than the following business day, provide to the Buyer copies of any
notices it receives from the Principal Market regarding the continued
eligibility of Company common stock for listing on such automated quotation
system or securities exchange. The Company shall pay all fees and expenses in
connection with satisfying its obligations under this Section 4(f).
g. RESERVATION OF SHARES; ISSUANCE OF WARRANT SHARES. The
Company shall take all action necessary to at all times have authorized, and
reserved for the purpose of issuance, no less than 100% of the number of shares
of Company common stock needed to provide for the issuance of the shares of
Company common stock upon exercise of all outstanding Warrants. The issuance of
the Warrant Shares shall be duly authorized, and when issued in accordance with
the Warrants, the Warrant Shares will be validly issued, fully paid and
non-assessable and free of all taxes, liens, charges and preemptive rights with
respect to the issue thereof.
h. BUSINESS COMBINATION; TRANSFER AGENT. Unless and until the
Common Shares have been registered pursuant to an effective Registration
Statement (as defined in the Registration Rights Agreement) or the Buyer has
provided their prior written consent, the Company shall not (i) enter into any
merger, sale of all or substantially all of the Company's assets or other
business combination or other corporate reorganization in which the Company is
not the surviving entity after such transaction(s) or (ii) select, appoint or
enter into any arrangement or agreement with a party other than Interwest
Transfer Company, Inc. (the "TRANSFER AGENT") to serve as transfer agent for the
Company.
i. LIMITATION ON FILING REGISTRATION STATEMENTS. The Company
shall not file a registration statement (other than (a) the Registration
Statement (as defined in the Registration Rights Agreement) or (b) a
registration statement on Form S-8 or (c) a registration statement registering
Company common stock issued to a person or entity directly in connection with a
strategic joint venture transaction or (d) a registration statement registering
currently outstanding stock options, rights, warrant or shares issued to
officers, directors, employees or consultants or (e) a registration statement
filed pursuant to the Halifax/Palladin Purchase Agreement, or (f) a registration
statement filed pursuant to the exercise by Halifax or Palladin of the rights of
first refusal granted them pursuant to the Halifax/Palladin Purchase Agreement
or (g) a registration statement covering shares set forth on Schedule 3(v) of
the Registration Rights Agreement, or (h) a registration statement registering
shares issued or issuable pursuant to an Exempt Issuance ) covering the sale or
resale of shares of Company common stock with the SEC during the period
beginning on the date hereof and ending on the date which is 30 days after the
Registration Statement has been declared effective by the SEC.
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j. FILING OF FORM 8-K AND PRESS RELEASE. On or before the
fifth (5th) business day following the Closing Date, the Company shall file a
Form 8-K with the SEC describing the terms of the transactions contemplated by
the Transaction Documents in the form required by the 1934 Act. On or before the
second (2nd) business day following the Closing Date, the Company shall issue a
press release (previously approved by the Buyer) describing the terms of the
transactions contemplated by the Transaction Documents.
k. CORPORATE EXISTENCE AND TAXES. Until all of the Common
Shares and Warrant Shares have been registered pursuant to an effective
Registration Statement, the Company shall maintain its corporate existence in
good standing (provided, however, that the foregoing covenant shall not prevent
the Company from entering into any merger or corporate reorganization as long as
the surviving entity in such transaction, if not the Company, has common stock
listed for trading on the Principal Market and shall pay all its taxes when due
except for taxes which the Company disputes).
5. TRANSFER AGENT INSTRUCTIONS.
The Company shall issue irrevocable instructions to the Transfer Agent
substantially in the form of EXHIBIT B hereto (the "TRANSFER AGENT
INSTRUCTIONS"). Prior to registration of the Common Shares and Warrant Shares
under the 1933 Act, all such certificates shall bear the restrictive legend
specified in Section 2(g) of this Agreement. The Company warrants that no
instruction other than the Transfer Agent Instructions referred to in this
Section 5, and stop transfer instructions to give effect to Section 2(f) hereof
will be given by the Company to its Transfer Agent and that the Securities shall
otherwise be freely transferable on the books and records of the Company as and
to the extent provided in this Agreement and the Registration Rights Agreement.
Nothing in this Section 5 shall affect in any way the Buyer's obligations and
agreements set forth in Section 2(g) to comply with all applicable prospectus
delivery requirements, if any, upon resale of the Securities. If a Buyer
provides the Company (and its counsel) with an opinion of counsel, in a
generally acceptable form, to the effect that a public sale, assignment or
transfer of the Securities may be made without registration under the 1933 Act
or the Buyer provides the Company (and its counsel) with reasonable assurances
that the Securities can be sold pursuant to Rule 144 promulgated under the 1933
Act ("RULE 144")without any restriction as to the number of securities acquired
as of a particular date that can then be immediately sold, the Company shall
permit the transfer, and, promptly instruct its Transfer Agent to issue one or
more certificates in such name and in such denominations as specified by the
Buyer and without any restrictive legend. The Company acknowledges that a breach
by it of its obligations hereunder will cause irreparable harm to the Buyer by
vitiating the intent and purpose of
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the transaction contemplated hereby. Accordingly, the Company acknowledges that
the remedy at law for a breach of its obligations under this Section 5 will be
inadequate and agrees, in the event of a breach or threatened breach by the
Company of the provisions of this Section 5, that the Buyer shall be entitled,
in addition to all other available remedies, to an order and/or injunction
restraining any breach and requiring immediate issuance and transfer, without
the necessity of showing economic loss and without any bond or other security
being required.
6. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
The obligation of the Company hereunder to issue and sell the Common
Shares and Warrant to the Buyer at the Closing is subject to the satisfaction,
at or before the Closing Date, of each of the following conditions, provided
that these conditions are for the Company's sole benefit and may be waived by
the Company at any time in its sole discretion by providing the Buyer with prior
written notice thereof:
a. Such Buyer shall have executed each of the Transaction
Documents to which it is a party and delivered the same to the Company for the
transactions contemplated by this Agreement;
b. Such Buyer shall have delivered to the Escrow Agent the
Purchase Price for the Common Shares and Warrant being purchased by the Buyer at
the Closing by wire transfer of immediately available funds pursuant to the wire
instructions provided by the Company or the Escrow Agent;
c. The representations and warranties of the Buyer shall be
true and correct in all material respects as of the date when made and as of the
Closing Date as though made at that time (except for representations and
warranties that speak as of a specific date), and the Buyer shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by the Buyer at or prior to the Closing Date;
d. Such Buyer shall have delivered to the Company such other
documents relating to the transactions contemplated by this Agreement as the
Escrow Agent or its counsel may reasonably request; and
e. [Omitted].
f. The Company and the Placement Agent shall have entered into
the placement agent agreement.
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7. CONDITIONS TO EACH BUYER'S OBLIGATION TO PURCHASE.
The obligation of the Buyer hereunder to purchase the Common Shares and
Warrant at the Closing is subject to the satisfaction, at or before the Closing
Date, of each of the following conditions, provided that these conditions are
for the Buyer's sole benefit and may be waived by the Buyer at any time in its
sole discretion by providing the Company with prior written notice thereof:
a. The Company shall have executed each of the Transaction
Documents and delivered the same to the Buyer;
b. The Company's common stock shall be authorized for
quotation on the Principal Market and trading in Company common stock shall not
have been suspended by the SEC or the Principal Market;
c. The representations and warranties of the Company shall be
true and correct, in all material respects, as of the date when made and as of
the Closing Date as though made at that time (except for representations and
warranties that speak as of a specific date) and the Company shall have
performed, satisfied and complied, in all material respects, with the covenants,
agreements and conditions required by the Transaction Documents to be performed,
satisfied or complied with by the Company at or prior to the Closing Date;
d. The Company shall have delivered to the Buyer the opinion
of the Company's counsel dated as of the Closing Date, substantially in the form
of EXHIBIT C attached hereto;
e. The Company shall have executed and delivered to the Buyer
the Warrant and the certificates representing Common Shares (in such
denominations as the Buyer shall request) for the Common Shares being purchased
by the Buyer at the Closing;
f. The Transfer Agent Instructions, in the form of EXHIBIT B
attached hereto, shall have been delivered to and acknowledged in writing by the
Company's transfer agent and a copy of the executed Transfer Agent Instructions
shall have been delivered to the Escrow Agent;
g. The Company shall have made all filings, other than those
(i) contemplated by the Registration Rights Agreement, (ii) the filings with the
Principal Market to secure listing of the Common Shares and Warrant Shares and
(iii) the filings required by Section 4(j) above, under all applicable federal
and state securities laws necessary to consummate the issuance of the Securities
pursuant to this Agreement in compliance with such laws;
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h. The Company shall have delivered to the Escrow Agent such
other documents relating to the transactions contemplated by this Agreement as
the Escrow Agent or its counsel may reasonably request;
i. [Omitted].
j. Subject to Section 11(l) below, at the Closing, the Company
shall reimburse the Buyer for the Buyer's attorneys' fees and expenses (in an
amount not to exceed $20,000.00), by allowing the Buyer to deduct such fees and
expenses from the Purchase Price, incurred by the Buyer concerning the due
diligence review of the contemplated transactions and the Company, and the
negotiation and preparation of the Transaction Documents and the consummation of
the transactions contemplated thereby;
k. The Company and the Placement Agent shall have entered into
the placement agent agreement; and
l. As of the Closing Date, the Company shall have reserved out
of its authorized and unissued common stock, solely for the purpose of effecting
the exercise of the Warrants, no less than 100% of the number of shares of
Company common stock needed to provide for the issuance of the shares of Company
common stock upon exercise of all outstanding Warrants.
8. INDEMNIFICATION.
a. INDEMNIFICATION BY COMPANY. In consideration of the Buyer's
execution and delivery of the Transaction Documents and acquiring the Securities
thereunder and in addition to all of the Company's other obligations under the
Transaction Documents, the Company shall defend, protect, indemnify and hold
harmless the Buyer and all of their stockholders, partners, officers, directors,
employees and any of the foregoing person's agents or other representatives
(including, without limitation, those retained in connection with the
transactions contemplated by this Agreement) (collectively, the "BUYER
INDEMNITEES") from and against any and all actions, causes of action, suits,
claims, losses, costs, penalties, fees, liabilities and damages, and expenses in
connection therewith and including reasonable attorneys' fees and disbursements
(the "BUYER INDEMNIFIED LIABILITIES"), incurred by the Buyer Indemnitee as a
result of, or arising out of, or relating to (a) any material misrepresentation
or breach of any representation or warranty made by the Company in the
Transaction Documents or any other certificate, instrument or document
contemplated hereby or thereby, (b) any material breach of any covenant,
agreement or obligation of the Company contained in the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby,
(c) any cause of
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action, suit or claim brought or made against the Buyer Indemnitee and arising
out of or resulting from the execution, delivery, performance or enforcement of
the Transaction Documents or any other certificate, instrument or document
contemplated hereby or thereby, or (d) any transaction financed or to be
financed in whole or in part, directly or indirectly, with the proceeds of the
issuance of the Securities. To the extent that the foregoing undertaking by the
Company may be unenforceable for any reason, the Company shall make the maximum
contribution to the payment and satisfaction of each of the Buyer Indemnified
Liabilities which is permissible under applicable law.
b. INDEMNIFICATION BY BUYER. In consideration of the Company's
execution and delivery of the Transaction Documents and the Company's
performance of the transactions contemplated thereunder, the Buyer shall
severally and not jointly defend, protect, indemnify and hold harmless the
Company, its officers and directors (collectively, the "COMPANY INDEMNITEES")
from and against any and all actions, causes of action, suits, claims, losses,
costs, penalties, fees, liabilities and damages, and expenses in connection
therewith and including reasonable attorneys' fees and disbursements (the
"COMPANY INDEMNIFIED LIABILITIES"), incurred by any Company Indemnitee as a
result of, or arising out of, or relating to (a) any material representation or
breach of any representation or warranty made by the Buyer in the Transaction
Documents or any other certificate, instrument or document contemplated hereby
or thereby, or (b) any material breach of any covenant, agreement or obligation
of the Buyer contained in the Transaction Documents or any other certificate,
instrument or document contemplated hereby or thereby; provided, however, that
the Buyer shall not be jointly liable for the indemnification obligations of any
other Buyer or investor and the Buyer subject to an indemnification obligation
shall be liable under this Section 8(b) for only that amount of Company
Indemnified Liabilities as does not exceed the net proceeds to the Buyer as a
result of the sale of Common Shares held by the Buyer. To the extent that the
foregoing undertaking by a Buyer may be unenforceable for any reason, the Buyer
shall make the maximum contribution to the payment and satisfaction of each of
the Company Indemnified Liabilities which is permissible under applicable law;
provided, however, that the Buyer shall not be jointly liable for the
indemnification obligations of any other Buyer or investor and the Buyer subject
to an indemnification obligation shall be liable under this Section 8(b) for
only that amount of Company Indemnified Liabilities as does not exceed the net
proceeds to the Buyer as a result of the sale of Common Shares held by the
Buyer.
9. ANTI-DILUTION ADJUSTMENTS. Prior to the registration of the
Common Shares and Warrant Shares pursuant to an effective Registration Statement
(as described in the Registration Rights Agreement), if the Company shall, at
any time or from time to time, issue Company common stock or instruments
convertible or exercisable into Company common stock (other than Company common
stock issued or issuable pursuant to an employee stock option incentive plan or
Company common
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stock issued or issuable in connection with a merger or other business
combination or reorganization of the Company or Company common stock issuable in
a firm commitment, underwritten public offering or Company common stock issuable
upon the exercise or conversion of the Company's options, warrants or other
convertible securities currently outstanding (including those outstanding
convertible instruments which are to be issued upon exercise of a Company put)
as of the date hereof or Company common stock issuable upon the consummation of
a transaction with or an investment by the entity disclosed by the Company to
the Buyer in writing prior to or at the Closing or securities issued by the
Company pursuant to a strategic joint venture transaction (each, an "EXEMPT
ISSUANCE")) at a price per common stock share, a conversion price per common
stock share or an exercise price per common stock share less than $2.053 per
common stock share (such lesser price shall be deemed the "DIFFERENTIAL PRICE"),
then the Company shall issue additional shares of Company Common Stock to the
Buyer equal to the Share Differential Amount. The "SHARE DIFFERENTIAL AMOUNT"
shall equal the sum of (i) the amount determined by dividing the Differential
Price into the Buyer's aggregate Purchase Price, less (ii) the number of Common
Shares purchased by the Buyer at the Closing. Any such additional shares of
common stock after issuance shall be deemed to be Common Shares for purposes of
this Agreement and shall have the registration rights set forth in the
Registration Rights Agreement.
10. RESET PROVISION. In the event that on the earlier of (a) the
effective date of the registration of the Common Shares and Warrant Shares
pursuant to the Registration Statement or (b) the first (1st) annual anniversary
of the Closing Date (either date, the "RESET DATE"), the average of the closing
bid prices for the Company's Common Stock as quoted on the Principal Market for
the twenty (20) trading days immediately preceding the Reset Date is less than
$2.053 per share, then the Company shall immediately issue additional shares of
Company Common Stock to the Buyer equal to the Reset Share Amount. The "RESET
SHARE AMOUNT" shall equal the sum of (1) the amount determined by dividing the
Reset Price (defined below) into the Buyer's Purchase Price, less (2) the number
of Common Shares purchased by the Buyer from the Company on the Closing Date.
Any such additional shares of Company Common Stock issued to the Buyer pursuant
to this Section 10 shall be deemed to be Common Shares for purposes of this
Agreement and shall have the registration rights set forth in the Registration
Rights Agreement. For purposes of this Section 10, "RESET PRICE" means the
greater of (i) the product derived by multiplying (A) eighty-five percent (85%)
by (B) the average of the closing bid prices for the Company's Common Stock as
quoted on the Principal Market for the twenty (20) trading days immediately
preceding the Reset Date or (ii) $1.0265 per share; provided, however, that in
no event shall the Reset Price be greater than $2.053 per share.
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11. GOVERNING LAW; MISCELLANEOUS.
a. GOVERNING LAW; JURISDICTION; JURY TRIAL. The corporate laws
of the State of Florida shall govern all issues concerning the relative rights
of the Company and its stockholders. All other questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by the internal laws of the State of Florida, without giving effect
to any choice of law or conflict of law provision or rule (whether of the State
of Florida or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State of Florida.
b. COUNTERPARTS. This Agreement may be executed in two or more
identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party; provided that a facsimile signature
shall be considered due execution and shall be binding upon the signatory
thereto with the same force and effect as if the signature were an original, not
a facsimile signature.
c. HEADINGS. The headings of this Agreement are for
convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement.
d. SEVERABILITY. If any provision of this Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction.
e. ENTIRE AGREEMENT; AMENDMENTS. This Agreement supersedes all
other prior oral or written agreements between the Buyer, the Company, their
affiliates and persons acting on their behalf with respect to the matters
discussed herein, and this Agreement and the instruments referenced herein
contain the entire understanding of the parties with respect to the matters
covered herein and therein and, except as specifically set forth herein or
therein, neither the Company nor the Buyer makes any representation, warranty,
covenant or undertaking with respect to such matters. No provision of this
Agreement may be amended other than by an instrument in writing signed by the
Company and the Buyer, and no provision hereof may be waived other than by an
instrument in writing signed by the party against whom enforcement is sought.
f. NOTICES. Any notices, consents, waivers or other
communications required or permitted to be given under the terms of this
Agreement must be in writing and will be deemed to have been delivered: (i) upon
receipt, when delivered personally; (ii) upon receipt, when sent by facsimile
(provided confirmation of transmission is mechanically or electronically
generated and kept on file by the sending party); or (iii) one business day
after deposit with a nationally recognized overnight
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delivery service, in each case properly addressed to the party to receive the
same. The addresses and facsimile numbers for such communications shall be:
If to the Company:
Visual Data Corporation
0000 X.X. 00xx Xxxxxx
Xxxxxxx Xxxxx, Xxxxxxx 00000
Telephone: 954/000-0000
Facsimile: 954/917-6660
Attention: Xxxxx X. Xxxxxx
With a copy to:
Atlas, Xxxxxxxx P.A.
000 X. Xxx Xxxx Xxxx., Xxxxx 0000
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxxxxxx, Esq.
If to the Transfer Agent:
Interwest Transfer Company, Inc.
0000 X. Xxxxxx Xxxxxxxx Xxxx, Xxx. 000
Xxxx Xxxx Xxxx, Xxxx 00000
Telephone: 801/000-0000
Facsimile: 801-277-3147
Attention: Xxxxxxx Xxxx
If to a Buyer, to it at the address and facsimile number set forth on SCHEDULE 1
with copies to the Buyer's representatives as set forth on SCHEDULE 1, or at
such other address and/or facsimile number and/or to the attention of such other
person as the recipient party has specified by written notice given to each
other party five days prior to the effectiveness of such change.
g. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the parties and their respective successors and
assigns, including any purchasers of the Common Shares. The Company shall not
assign this Agreement or any rights or obligations hereunder without the prior
written consent of the Buyer. A Buyer may assign some or all of its rights
hereunder without the consent of the Company, provided, however, that any such
assignment shall not release the
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Buyer from its obligations hereunder unless such obligations are assumed by
such assignee and the Company has consented to such assignment and assumption.
h. NO THIRD PARTY BENEFICIARIES. This Agreement is intended
for the benefit of the parties hereto and their respective permitted successors
and assigns, and is not for the benefit of, nor may any provision hereof be
enforced by, any other person.
i. SURVIVAL. Unless this Agreement is terminated under Section
11(l), the agreements and covenants set forth in Sections 4, 5 and 11, the
indemnification provisions set forth in Section 8 and the anti-dilution
adjustments and provisions set forth in Section 9 shall survive the Closing.
Each Buyer shall be responsible only for its own representations, warranties,
agreements and covenants hereunder.
j. [Reserved].
k. FURTHER ASSURANCES. Each party shall do and perform, or
cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments and
documents, as the other party may reasonably request in order to carry out the
intent and accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
l. TERMINATION. In the event that the Closing shall not have
occurred with respect to the Buyer on or before three (3) business days from the
date hereof due to the Company's or the Buyer's failure to satisfy the
conditions set forth in Sections 6 and 7 above (and the nonbreaching party's
failure to waive such unsatisfied condition(s)), the nonbreaching party shall
have the option to terminate this Agreement with respect to such breaching party
at the close of business on such date without liability of any party to any
other party; provided, however, that if this Agreement is terminated pursuant to
this Section 11(l), the Company shall remain obligated to reimburse the
nonbreaching Buyer for the expenses described in Section 4(g) above.
m. PLACEMENT AGENT. The Company acknowledges that it has
engaged Montauk Financial, Inc. as placement agent (the "PLACEMENT AGENT") in
connection with the sale of the Common Shares and Warrant, which placement agent
may have formally or informally engaged other agents on its behalf. The Company
shall be responsible for the payment of any placement agent's fees or broker's
commissions relating to or arising out of the transactions contemplated hereby.
The Company shall pay, and hold the Buyer harmless against, any liability, loss
or expense (including, without limitation, attorneys' fees and out of pocket
expenses) arising in connection with any such claim.
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n. NO STRICT CONSTRUCTION. The language used in this Agreement
will be deemed to be the language chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any party.
o. REMEDIES. Each Buyer and each holder of the Securities
shall have all rights and remedies set forth in the Transaction Documents and
all rights and remedies which such holders have been granted at any time under
any other agreement or contract and all of the rights which such holders have
under any law. Any Person having any rights under any provision of this
Agreement shall be entitled to enforce such rights specifically (without posting
a bond or other security), to recover damages by reason of any breach of any
provision of this Agreement and to exercise all other rights granted by law.
IN WITNESS WHEREOF, the Buyer and the Company have caused this
Securities Purchase Agreement to be duly executed as of the date first written
above.
COMPANY: BUYER:
VISUAL DATA CORPORATION PROTIUS OVERSEAS LIMITED
By: By:
-------------------------------- ------------------------------------
Name: Name:
------------------------------ ----------------------------------
Title: Title:
----------------------------- ----------------------------------
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